ROLE OF CHARM PRICING IN PURCHASE DECISION -A STUDY OF ONLINE CONSUMERS OF PAKISTAN

Abstract

This research aims to explore the role of charm pricing in the purchase decisions of online customers of Pakistan. After an extensive literature review, a gap is found to explore specifically the role of "charm pricing strategy" in the purchase decision of customers with emerging online shopping context. This study is potentially beneficial for marketers and advertisers of those companies doing online business in Pakistan to enhance their sales through relevant pricing mix. Based on constructivist philosophy, this study has taken the qualitative approach and exploratory strategy is used. Non-numeric qualitative data is collected through semi-structured interviews from online consumers. Purposive sampling technique is used, as we have selected the participants who are actively involved in online shopping. There were a total of 14 interviews conducted and the 13th interview manifested the saturation point, the 14th was conducted to validate it. The interview protocol was designed with a semi-structured design. Consent forms were also prepared which were filled by the participants. Axial codes were prepared from the transcripts and field notes. Thematic analysis was performed on the codes and results were extracted. Result suggests that, in the online shopping setting, urban customers tend to perceive charm pricing as a marketing tool by companies to lure customers, and therefore they usually do not take this into their considering while making purchase decisions. Customers with rural backgrounds, however, tend to perceive charm pricing as discount and it usually lures them to explore those products further on websites and make purchase decision. Researches on the same domain, albeit with quantitative approach, on the impact of different pricing strategies and discounts on consumers have been conducted internationally, however, no qualitative research is yet undertaken on specifically the role of charm pricing on online customer's purchase decisions in the local context.

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Journal of Business Administration and Management Sciences
July 2018 Vol. 02 Issue No. 02
327
ROLE OF CHARM PRICING IN PURCHASE DECISION – A STUDY OF ONLINE
CONSUMERS OF PAKISTAN
Asif Hussain Samo* Hadeeqa** Yusra Asif** Muhammad Danish Mujtaba***
ABSTRACT
This research aims to explore the role of charm pricing in purchase decision of online customers of
Pakistan. After extensive literature review, a gap is found to explore specifically the role of “charm
pricing strategy” in the purchase decision of customers with emerging online shopping context. This
study is potentially beneficial for marketers and advertisers of those companies doing online business
in Pakistan to enhance their sales through relevant pricing mix. Based on constructivist philosophy,
this study has taken qualitative approach and exploratory strategy is used. Non-numeric qualitative
data is collected through semi-structured interview from the online consumers. Purposive sampling
technique is used, as we have selected the participants who are actively involved in online shopping.
There were total 14 interviews conducted and 13th interview manifested the saturation point, the 14th
was conducted to validate it. Interview protocol was designed with semi-structured design. Consent
forms were also prepared which were filled by the participants. Axial codes were prepared from the
transcripts and field notes. Thematic analysis was performed on the codes and results were extracted.
Result suggests that, in the online shopping setting, urban customers tend to perceive charm pricing
as marketing tool by companies to lure customers, and therefore they usually do not take this into
their considering while making purchase decisions. Customers with rural background, however, tend
to perceive charm pricing as discount and it usually lures them to explore those products further on
websites and make purchase decision. Researches on the same domain, albeit with quantitative
approach, on the impact of different pricing strategies and discounts on consumers have been
conducted internationally, however, no qualitative research is yet undertaken on specifically the role
of charm pricing on online customer’s purchase decisions in the local context.
Keywords - Charm pricing, pricing strategy, consumer’s perception, consumer’s purchase decision.
JEL Classification: M3
1. INTRODUCTION
Pricing has always been an integral component of marketing
1
of the traditional marketing elements, only pricing
creates revenue
2
. From the most prime and basic decision for business, it is more critical decision that what would be
the price of product and service they should ask with their customer
3
.
Pricing strategies are used by marketers when they take any decision about 4ps of marketing. Psychological pricing is
one of those pricing strategies in which different psychological aspects are used by marketers to influence consumers
mind positively
4
.
Often Retail prices are showed as “charm prices or odd prices “a round number little less than actual. From all the
tactics of listing prices, the tactic of psychological pricing is draft to get the attention of customers who react on
1
Grewal, Dhruv, Kusum L. Ailawadi, Dinesh Gauri, Kevin Hall, Praveen Kopalle, and Jane R. Robertson. 2011.
“Innovations in Retail Pricing and Promotions.” Journal of Retailing 87 (SUPPL. 1).
2
Mazumdar, Tridib, S.P. Raj, and Indrajit Sinha. 2005. “Reference Price Research: Review and Propositions.”
Journal of Marketing 69 (4): 84–102.
3
Kohli, Chiranjeev, and Rajneesh Suri. 2011. “The Price Is Right? Guidelines for Pricing to Enhance Profitability.”
Business Horizons 54 (6): 563–73.
4
Homburg, Christian, Nicole Koschate, and Wayne D. Hoyer. 2005. “Do Satisfied Customers Really Pay More? A
Study of the Relationship between Customer Satisfaction and Willingness to Pay.” Journal of Marketing 69 (2): 84–
96.
*Corresponding Author, Lecturer, Department of Business Administration, Sindh Madressatul Islam University
Karachi, Pakistan. E-mail: asif.samo@smiu.edu.pk
** Student, Department of Business Administration, Sindh Madressatul Islam University Karachi, Pakistan.
*** Lecturer, Department of Business Administration, Sindh Madressatul Islam University Karachi

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emotional responses to pricing other than highly rational thinking
5
. The purpose of charm pricing is to make the
customer think that the product is on sale or it has become cheaper than it was in. For instance, the price of a shampoo
is written 99rs instead of 100rs. The customers are more likely to remember the odd ending prices of product rather
than even ending prices
6
. Odd prices, also have other names such as charm prices, intuitive prices psychological prices,
magic prices irrational prices
7
. And now the use of charm pricing is now taking place in many countries of the world.
The purchaser reaction mark name, shading, bundle, measure, name and cost
8
. The association of these data signals
as buy choice information sources relies upon the perceptual procedure an individual users to offer significance to the
item
9
.
Psychological & mental variables like appeal valuing configuration can impact purchasers buy choice in web-based
shopping division of Pakistan
10
. This study fulfills this gap. The procedure of appeal estimating is utilized as a part of
Pakistan in various divisions like nourishment and lodging area. Relationship exists within the same consumer
regarding a broader array of involvements toward a given object (e.g., a product, purchase decision, advertising or
consumption
11
. The cognitive characteristics and enduring nature of involvement has not always been evident in the
treatment of involvement within consumer behavior, especially when determining involvement through goals and
consequences associated with a purchasing situation or information processing occasion. Within this context, the
enduring nature of involvement may be easily overlooked or neglected
12
.
Up to this point, there was no indisputable research proof to help the presumption that odd evaluating expands request
in internet shopping sections of Pakistan, so this examination is intended to satisfy this hole
13
.
1.1. History of Charm Pricing
According to a source charm pricing initiated in a competition of a newspaper pricing, proposing to value it at one
penny to contend with the nickel papers of the day. The story asserts that pennies were not basic money at the time,
thus Stone connived with publicists to set entire dollar costs a penny lower, in this way ensuring clients would get
adequate pennies in change
14
.
Precisely how mental estimating came into regular utilize isn't clear, however, it is known the training emerged amid
the late nineteenth century. One source hypothesizes it started in a daily paper evaluating rivalry
15
, meaning to value
it at one penny to contend with the nickel papers of the day. The story guarantees that pennies were not normal money
at the time, thus Stone conspired with sponsors to set entire dollar costs a penny lower—accordingly ensuring that
5
Zuroni, Md Jusoh, and Hai Ling Goh. 2012. “Factors Influencing Consumers’ Attitude towards E-Commerce
Purchases through Online Shopping.” International Journal of Humanities and Social Science 2 (4): 223–30.
6
Javadi, Mohammad Hossein Moshref, Hossein Rezaie Dolatabadi, Mojtaba Nourbakhsh, Amir Poursaeedi, and
Ahmad Reza Asadollahi. 2012. “An Analysis of Factors Affecting on Online Shopping Behavior of Consumers.”
International Journal of Marketing Studies 4 (5): 81–98.
7
Nazir, Sajjad, Arsalan Tayyab, Aziz Sajid, Haroon Ur Rashid, and Irum Javed. 2012. “How Online Shopping Is
Affecting Consumers Buying Behavior in Pakistan?” IJCSI International Journal of Computer Science 9 (3): 486–
95.
8
Seiler, Michael J, Poornima Madhavan, and Molly Liechty. 2012. “Toward an Understanding of Real Estate
Homebuyer Internet Search Behavior: An Application of Ocular Tracking Technology.” Journal of Real Estate
Research 34 (2): 211–41.
9
Larson, Ronald B. 2014. “Psychological Pricing Principles for Organizations with Market Power.” Journal of
Applied Business and Economics 16 (1): 11–25.
10
Kinard, Brian R., Michael L. Capella, and Greg Bonner. 2013. “Odd Pricing Effects: An Examination Using
Adaptation‐level Theory.” Journal of Product & Brand Management 22 (1): 87–94.
11
Wieseke, Jan, Sascha Alavi, and Johannes Habel. 2014. “Willing to Pay More, Eager to Pay Less: The Role of
Customer Loyalty in Price Negotiations.” Journal of Marketing 78 (6): 17–37.
12
Zhou, Lina, Liwei Dai, and Dongsong Zhang. 2007. “Online Shopping Acceptance Model: Critical Survey of
Consumer Factors in Online Shopping.” Journal of Electronic Commerce Research 8 (1): 41–62.
13
Holdershaw, Judith. 1997. “The Widespread Use of Odd Pricing in the Retail Sector.” Marketing Bulletin 8
(1997): 53–58.
14
Boyes, William J., Allen K. Lynch, and Wm Stewart Mounts. 2007. “Why Odd Pricing?” Journal of Applied
Social Psychology 37 (5): 1130–40.
15
Gendall, Philip. 1998. “Estimating the Effect of Odd Pricing.” Journal of Product & Brand Management 7 (5):
421–32.

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clients would get abundant pennies in change
16
. One would surmise that something just a couple of pennies under an
entire dollar would really be painful to the cost. This hypothesis works so well on account of how the "reference cost"
is built up by the purchaser. The reference cost for something that is $19.98 would be $20. This sets up the odd
evaluating as a superior arrangement
17
.
A few examinations have demonstrated that when costs are introduced to a prospect in diving request (as opposed to
climbing request) constructive outcomes result, predominantly an eagerness to pay a higher cost, higher view of
significant worth, and higher likelihood of procurement
18
. The explanation behind this is when exhibited in the
previous, the higher value fills in as a source of perspective point, and the lower costs are seen positive accordingly
19
.
1.2. Research Problem
Psychological aspects which affects the consumer’s mind and ultimately their purchase decision. Charm pricing can
be one of those strategies which affects the consumer’s purchasing decision positively. In Pakistan, many companies
are using this strategy.
“The aim of this research is to explore the role of charm pricing strategy in decision of online consumers in Pakistan”
1.3. Objectives of the Study
 To explore the consumer’s perception about charm pricing.
 To explore the specific reasons associated with the strategy of charm pricing which change the perception of
consumers.
2. LITERATURE REVIEW
Assessing systems have been tentatively inspected since in any occasion observe that the overwhelming piece of
customer incredible expenses in the U.S. end with an odd number, particularly 9 or 5.
20
Subsequently, most retail
nourishment things, for instance, are estimated utilizing this procedure
21
. Pricing has always been an integral
component of marketing; of the traditional marketing elements, only pricing creates revenue
22
. One of the more basic,
yet critical decisions facing a business is what price to charge customers for products and services
23
.
The broad use of "just beneath" valuing isn't one of a kind to a modest bunch of nations or to a specific area of the
world,60 % of all costs end in a "9," while just 7 % end with a "0"
24
. A progression of concentrates from the 1990s
backings the idea that "just underneath" estimating brings about more prominent deals volume than adjusted valued
merchandise
25
.Psychological pricing is a tactic of pricing which is draft to attract customers who react on emotional
rather than rational responses to pricing messages
26
. The purpose of charm pricing is to make the customer believe the
product is cheaper than it really.
Not at all like most customer merchandise and fluid budgetary resources where the purchaser pays the spot cost or
leaves, is it conceivable that a similar evaluating systems that advantage the merchant of cleanser or a chunk of bread
16
Hinterhuber, Andreas, and Stephan M. Liozu. 2014. “Behavioral and Psychological Aspects of B2b Pricing.”
Industrial Marketing Management 47: 4–5.
17
Grewal et al., Innovations in Retail Pricing and Promotions. 87
18
Carver, James R., and Daniel T. Padgett. 2012. “Product Category Pricing and Future Price Attractiveness: 99-
Ending Pricing in a Memory-Based Context.” Journal of Retailing 88 (4): 497–511.
19
Zuroni et al., Factors Influencing Consumers’ Attitude towards E-Commerce Purchases through Online Shopping,
223–30.
20
Kinard et al., Odd Pricing Effects: An Examination Using Adaptation‐level Theory, 87–94.
21
Bizer, George Y., and Robert M. Schindler. 2005. “Direct Evidence of Ending-Digit Drop-off in Price
Information Processing.” Psychology and Marketing.
22
Ater, Itai, and Omri Gerlitz. 2017. “Round Pric Es and Price Rigidity: Evidence from Outlawing Odd Prices.”
Journal of Economic Behavior and Organization 144: 188–203.
23
Hong, Weiyin, James Y.L. Thong, and Kar Yan Tam. 2004. “The Effects of Information Format and Shopping
Task on Consumers’ Online Shopping Behavior: A Cognitive Fit Perspective.” Journal of Management Information
Systems 21 (3): 149–84.
24
Mazumdar et al., Reference Price Research: Review and Propositions, 84–102.
25
Collins, Michael, and H. G. Parsa. 2006. “Pricing Strategies to Maximize Revenues in the Lodging Industry.”
International Journal of Hospitality Management 25 (1): 91–107.
26
Salter, Sean P., Ken H. Johnson, and Ernest W. King. 2010. “Listing Specialization and Pricing Precision.”
Journal of Real Estate Finance and Economics 40 (3): 245–59

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don't specifically mean home sellers
27
. There is possibility that the charm pricing strategy may not be beneficial or
effective for every kind of products
28
. So we have to be careful to implement this pricing strategy on any kind of
product. Currently, there has been an emerging awareness of the complicated role of price as a determiner of a purchase
decision, recent behavior study show that there is no simple explanation of price influences individual buyers purchase
decision
29
. There are many pricing strategies which are used by marketers when they take any decision about 4ps of
marketing. Psychological pricing is one of those pricing strategies in which different psychological aspects are used
by marketers to influence consumers mind positively
30
.
2.1. Charm pricing
You can impact individuals' memory at your cost. At the point when individuals contrast your cost with a reference
value, you can impact them to maneuver a lower cost into that correlation
31
. Value data about an item is probably not
going to be coded into memory as far as correct numerical digits at the same time, rather, is coded suddenly in more
broad size terms (e.g., "low," "high"). Consequently, the numerical cost is defenseless to the impact of its unique
setting when individuals endeavor to reproduce it later
32
. This is one of the estimating system utilized by advertisers
to pull in clients, as per this methodology advertisers demonstrates the cost of an item in odd numbers or in round
figures like 99 rupees rather than 100 rupees
33
.
2.2. A trick to make your price seem lower
Advertisers have utilized appeal evaluating costs that end in 9, 99, or 95. Appeal valuing is best when the left digit
changes
34
. A one-penny distinction amongst $3.80 and $3.79 won't make any difference. Be that as it may, a one-
penny contrast amongst $3.00 and $2.99 will have an enormous effect
35
. Mental evaluating systems and shopper’s
reaction conduct.
2.3. Why is the left digit so important?
Since it stays the apparent magnitude. Our brains encode numbers so rapidly (and past cognizance) that we encode
the measure of a number before we complete the process of understanding it
36
.While assessing "2.99," the size
encoding process begins when our eyes experience the digit "2." Consequently, the encoded extent of $2.99 gets
secured on the furthest left digit (i.e., $2) and turns out to be altogether lower than the encoded greatness of $3.00"
37
.So
this how the brain science factor impact the recognition about the cost.
2.4. Charm pricing & Consumer buying behaviour
The process of deciding and putting on the price for some goods and services is pricing strategy
38
. Charm pricing is
defined by various authors and experts in many ways, one its explanations says the customer usually sees the price of
product in its nearest round figure
39
. For example, if a price of any product is 4.99 $ (nearest to 5 $) so consumer
perceive it around 4$. Pricing is the element which have an impact on consumer buying behavior through psychology.
27
Zhou et al., Online Shopping Acceptance Model: Critical Survey of Consumer Factors in Online Shopping, 41–
62.
28
Nazir et al., How Online Shopping Is Affecting Consumers Buying Behavior in Pakistan? 486–95.
29
Gendall and Philip, Estimating the Effect of Odd Pricing, 421–32.
30
Carver et al., Product Category Pricing and Future Price Attractiveness: 99-Ending Pricing in a Memory-Based
Context, 497–511.
31
Collins et al., Pricing Strategies to Maximize Revenues in the Lodging Industry, 91–107
32
Hinterhuber et al., Behavioral and Psychological Aspects of B2b Pricing, 47: 4–5.
33
Javadi et al., An Analysis of Factors Affecting on Online Shopping Behavior of Consumers, 81–98.
34
Seiler et al., Toward an Understanding of Real Estate Homebuyer Internet Search Behavior: An Application of
Ocular Tracking Technology, 211–41.
35
Cotes-Torres, Alejandro, Pablo A. Muñoz-Gallego, and José Miguel Cotes-Torres. 2012. “S-Shape Relationship
between Customer Satisfaction and Willingness to Pay Premium Prices for High Quality Cured Pork Products in
Spain.” Meat Science 90 (3): 814–18.
36
Kohli et al., The Price Is Right? Guidelines for Pricing to Enhance Profitability, 563–73.
37
Boyes et al., Why Odd Pricing?, 1130–40.
38
Anderson, Eric T., and Duncan I. Simester. 2003. “Effects of $9 Price Endings on Retail Sales: Evidence from
Field Experiments.” Quantitative Marketing and Economics 1 (1): 93–110.
39
Zhou et al., Online Shopping Acceptance Model: Critical Survey of Consumer Factors in Online Shopping, 41–
62.

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Psychology is the intermediator between price and buying behavior of consumer
40
. Studies state that any lacking and
mistake in pricing strategy negatively effect on consumer buying behavior
41
.One of the study state that online
consumers have a different buying behavior rather than offline consumers as they have more areas to get information
about the product and its price
42
.Consumer buying behavior is influenced by many factors one of the major factor is
perception which further influenced the other factors mainly perceived value perceived willingness, perceived quality
etc.
43
Consumer’s usually perceive psychological pricing as a fair pricing so they accept this pricing strategy and
effects on its buying behavior directly or indirectly
44
. Looking deeply on both variables we can notice that one variable
which is charm pricing can influence the buying behavior or purchase decision of the consumers.
2.5. Prices and online shopping
Web has made in new transport channels electronic trades are extending rapidly
45
.This need has risen to perceive how
they see particularly to buy purchasers. By far most of the all-inclusive community who use the web to purchase stock
on the web, yet that there are as yet a couple of clarifications behind which customers are reluctant to buy on the
web
46
.The perspectives of people toward the purchase online are various in Pakistan. The inspiration driving this
examination is to review the components felt reservation of buyers in web shopping. It has been more than a long time
since the web business at first created
47
. Researchers and experts in the electronic exchange constantly try to gain a
prevalent comprehension in purchaser direct in the web. With the change of the retail E-business, researchers continue
clarifying E-perspective of purchasers of substitute perspectives
48
. Fundamental cognizance of buyer lead in the
electronic condition, as in this physical world, can be expert if the components that impact the purchase decision are
neglected or unequivocal
49
. For example, online purchasers' sentiments of fear about the need opportunity to take a
gander at things before purchase especially saw as capable factors in facilitate purchase decision. Hence, a couple of
researchers have proposed that the customers' purchasing conduct in online shops can be on an exceptionally essential
level not the same as that in the ordinary condition
50
.
Mosteller clears up the association between purchaser lead and exhibiting technique
51
. He communicates that
framework is tied in with growing the probability and repeat of buyer lead. Essentials for winning concerning doing
this are to know the customer and understand the client's needs and needs. Exactly when a customers to make
purchases online to buy something, he or she is affected by orchestrated component
52
. The central affecting variables
have been recognized as, esteem, conviction, security, comfort, time, after arrangement advantage and diminished
game plans
53
. The esteem factor exists in light of the fact that the expenses are frequently lower through electronic
40
Larson and Ronald, Psychological Pricing Principles for Organizations with Market Power, 11–25.
41
Gaston-Breton, C, and Lc Duque. 2012. “Promotional Benefits of 99-Ending Prices: The Moderating Role of
Intuitive and Analytical Decision Style.” Proceedings of the 41th Conference of the European Marketing Academy
(EMAC), no. December.
42
Wieseke et al., Willing to Pay More, Eager to Pay Less: The Role of Customer Loyalty in Price Negotiations, 17–
37.
43
Mazumdar et al., Reference Price Research: Review and Propositions, 84–102.
44
Gendall and Philip, Estimating the Effect of Odd Pricing, 421–32.
45
Ater et al., Round Pric Es and Price Rigidity: Evidence from Outlawing Odd Prices, 188–203.
46
Mosteller, Jill, Naveen Donthu, and Sevgin Eroglu. 2014. “The Fluent Online Shopping Experience.” Journal of
Business Research 67 (11): 2486–93.
47
Zuroni et al., Factors Influencing Consumers’ Attitude towards E-Commerce Purchases through Online Shopping,
223–30.
48
Choi, Jungsil, Yexin Jessica Li, Priyamvadha Rangan, Promothesh Chatterjee, and Surendra N. Singh. 2014. “The
Odd-Ending Price Justification Effect: The Influence of Price-Endings on Hedonic and Utilitarian Consumption.”
Journal of the Academy of Marketing Science 42 (5): 545–57.
49
Hong et al., The Effects of Information Format and Shopping Task on Consumers’ Online Shopping Behavior: A
Cognitive Fit Perspective, 149–84.
50
Nazir et al., How Online Shopping Is Affecting Consumers Buying Behavior in Pakistan? 486–95.
51
Mosteller et al., The Fluent Online Shopping Experience, 2486–93.
52
Breton et al., Promotional Benefits of 99-Ending Prices: The Moderating Role of Intuitive and Analytical
Decision Style
53
Bizer et al., Direct Evidence of Ending-Digit Drop-off in Price Information Processing

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shopping as differentiated and physical purchases in the market. Buy online can be of unimaginable favorable position
to the client to the extent comfort, saving time and money
54
.
An examination conducted on web shopping was related to online some interesting parts which will affect online
clients when they purchase from a webpage, essentially feedback to buy or to the website
55
. They have been discussed
the accomplishment of the business online weight on their ability to attract and hold for customers to their customers
can best usage of their chance over the expenses and to get any sort of thing information through web. With the change
of the Internet and the extending notoriety of online commercial centers, be that as it may, buyers are offered more
decisions not just as far as the item grouping yet moreover to the extent item estimating
56
.
So, at different parts of the world charm pricing strategy is in practice like corner stores in the U.S. take the "reasonable
underneath" assessing technique to the exceptional when they offer their gas at an esteem that completions in 9/10 of
a penny paying little regard to the way that no bona fide trade this little out classification exists
57
. The wide utilization
of "just underneath" evaluating isn't novel to only an unobtrusive cluster of countries or to a particular region of the
world. Schindler documented that 60 % of all costs end in a "9," while only 7 % end with a "0"
58
. A movement of
concentrates from the 1990s support "just underneath" esteeming achieves more essential arrangements volume than
balanced assessed items
59
. Accommodating impression of broadcasted retail costs all through New Zealand includes
the beneficial use of odd evaluating, the demonstration of esteeming just underneath the nearest round number (for
example, $9.99 instead of $10.00, or $99.95 as opposed to $100)
60
. The notoriety of costs completing off with the
digit 9 and, to a lesser degree, the digit 5, reflects the conviction that odd esteeming will make higher than expected
demand at the esteem level concerned
61
. In a manner of speaking, the acknowledged demand twist is accepted to be
"wrinkled" upwards at odd esteem centers. This exploration is done in our country on gas costs just yet not in other
sectors and not even in particularly online clients so we will satisfy this hole. We address these request by first
proposing a general sensible framework to verbalize how unique components effect on the web and detached choices.
Despite the way that there are numerous factors that impact online choice direct, we focus especially on looking over
whether draw in assessing technique have more impact on choices on the web or detached, and whether cost and other
chase qualities have higher impact on the web or separated.
3. RESEARCH METHODOLOGY
3.1. Research Design
Based on constructivist philosophy, this study has taken qualitative approach and exploratory strategy is used for
exploring the role of charm pricing and purchase decision of online customers of Pakistan. Non-numeric qualitative
data is collected through semi-structured interview from the online consumers.
3.2. Frame of references
The population of this study is consisted of online consumers of Pakistan who frequently shop online. The reason of
choosing them is that we can directly came to know about consumer’s perception in their own wording and
understanding. With the help of the knowledge and information they have, we can find the exact and accurate face of
this study and can get the present and future place of this strategy as well.
3.3. Sample & Sampling method
Purposive sampling technique is used, as we have selected the participants who are actively involved in online
shopping. There were total 14 interviews conducted and 13th interview manifested the saturation point, the 14th was
conducted to validate it.
54
Torres et al., S-Shape Relationship between Customer Satisfaction and Willingness to Pay Premium Prices for
High Quality Cured Pork Products in Spain, 814–18.
55
Nazir et al., How Online Shopping Is Affecting Consumers Buying Behavior in Pakistan?, 486–95.
56
Hong et al., The Effects of Information Format and Shopping Task on Consumers’ Online Shopping Behavior: A
Cognitive Fit Perspective, 149–84.
57
Ater et al., Round Pric Es and Price Rigidity: Evidence from Outlawing Odd Prices, 188–203.
58
Schindler, Robert M. 2006. “The 99 Price Ending as a Signal of a Low-Price Appeal.” Journal of Retailing 82 (1):
71–77.
59
Boyes et al., Why Odd Pricing?, 1130–40.
60
Breton et al., Promotional Benefits of 99-Ending Prices: The Moderating Role of Intuitive and Analytical
Decision Style
61
Salter et al., Listing Specialization and Pricing Precision, 245–59.

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3.4. Data collection method
Interview protocol was designed with semi-structured design. Consent forms were also prepared which were filled by
the participants. The interviews were conducted in calm and disturbing atmosphere, and with the consent of
participant, their interviews were audio recorded
3.5. Analysis
Recorded interviews were changed into written transcripts. Axial codes were prepared from the transcripts and field
notes. Thematic analysis was performed on the codes and results were extracted.
3.6. Propositions
3.6.1. Charm prices has influence on the perception of consumers, however, it may vary from customer to customer,
based on their demographic and geographic background.
3.6.2. Consumers might tend to perceive charm pricing as tricks and discount, however, it may lead them to look for
such product in detail if they come across charm prices.
4. ANALYSIS
4.1. Codified categories from Interviews
Table 4.1: Codified Categories from Interviews
Why do you go for online
shopping?
 Time saving
 Easily availability of brands
 Reasonable prices and discounts influence me to go for online
shopping
Important factors customers
consider
 Price
 Quality
 Delivery time (TAT)
 Authenticity of website and Brands
 Product Reviews
Ranking
 1st Ranking for price
 1st or Quality 2nd for Price
 1st for Brand 2nd for Price 3rd for Quality
What do you think about odd
numbers pricing?
 Company’s honesty
 Attractive pricing strategy
 Tax saving
 It's kind of discount
Does it attract you?
 Not that much because firstly I consider other factors as well
 Yes because I go for online shopping due to discounts etc.
 Yes it does because it is kind of SALE
Suppose a scenario
 I see the nature of my purchase decision then decide
 599.9 obviously
In % terms how often you see
this type of pricing online?
 80%
 60%
 Above 50%
In which type of products you
care about the price most?
 It do care about price in those products which we purchase often
 Not for less often purchase decision especially home appliances etc.
 For me brand and quality etc. are more important
What did you recently
purchase on charm pricing?
 Food & Beverages
 Clothing
 Personal care products

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Suppose the price of a
product is 89.99, is it under
the category of 80?
 Yes
 Its discount
 Its Trick
5. DISCUSSION
5.1 Consumer perception of charm pricing
Marketing tool: People who belong to the urban areas of Pakistan basically perceive this type of pricing as a marketing
trick. They are aware that this pricing is used by many companies to attract the customers. One of the interviewee
said;
“Yeah! When companies do quote their products as like this so actually they are playing with customer’s mind as we
tend to go cheaper products they just make their prices look attractive”.
It is supporting the research finding that advertisers have utilized appeal evaluating costs that end in 9, 99, or 95.
Appeal valuing is best when the left digit changes
62
.
Discount/sale offer: And those who are predominately belong to the rural areas of Pakistan consider charm pricing a
kind of discounted price. Even they perceive this like the product is on sale and at least some minor portion of saving
is being offered. Wordings of an interviewer were;
“Yes! I often observe this thing, this is a kind of sale the companies offer to their customers and for me it is quite
attractive since I like sale and discounts. And I think those companies who are most customer care conscious do this
thing that rather than quoting whole price like 100 they quote it 99.9, this thing shows that they care for customers
that they even make them save point one paisa even this is a kind of honesty as well that they exactly charge as
minimum as possible.”
This study is adding new knowledge in an existing researcher’s finding that, the customer usually sees the price of
product in its nearest round figure. For example if a price of any product is 4.99$ (nearest to 5$) so consumer perceive
it around 4$
63
.
5.2 Influence in customer’s purchase decision
Other factors consideration first: There are some customers who are very conscious about many other factors other
than price. These people are generally city residents so when they see charm prices of products they first consider
other factors like brand, quality and reviews and other factors before making purchase decision and these all things
have greater impact on their purchase decision as compared to charm pricing. As one consumer in interview said; “I
will see the situation and other factors. I will compare the brand and quality then I will decide either to purchase or
not”.
Our this study is supporting the finding of a researcher that consumer buying behavior is influenced by many factors
one of the major factor is perception which further influenced the other factors mainly perceived value perceived
willingness, perceived quality
64
.
Positive influence: Mostly rural residents and people who are not that conscious about the brands and website get
attracted by charm pricing. When they see charm prices of products online, at first sight, the prices catch their attention
because they perceive it as discount then they just click on these types of links to explore more about the products
which are being sell on charm pricing. One customer during interview exactly said;
“Yes, it becomes attractive to me. Since I like sale and discounts and I frequently purchase products on these types of
discounted prices online. I shop online because different sales and discounts are frequently being offered in online
context like this what you call (Charm pricing)”.
This research is contradicting with the finding of a research that the central affecting variables have been recognized
as, esteem, conviction, security, comfort, time and after arrangement advantage
65
.
6. CONCLUSION
Hence the findings of this study are that the category of urban residents perceive Cham pricing as marketing tool to
attract customer and this thing do not influence their purchase decision that much but on the other hand for the residents
of rural areas charm pricing is attractive kind of price discount and it influence their purchase decision positively in
62
Schindler and Robert, The 99 Price Ending as a Signal of a Low-Price Appeal, 71–77.
63
Ater et al., Round Pric Es and Price Rigidity: Evidence from Outlawing Odd Prices, 188–203.
64
Javadi et al., An Analysis of Factors Affecting on Online Shopping Behavior of Consumers, 81–98.
65
Zuroni et al., Factors Influencing Consumers’ Attitude towards E-Commerce Purchases through Online Shopping,
223–30.

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online shopping context. So the marketers of the companies may use this pricing strategy in online context as well to
increase their sales.
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